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Monday, June 19, 2017

How Accurate Is Credit Karma?

I don't know. I don't think anyone really knows. All I can tell you is what my experience has been--both as a Realtor and a Mortgage Broker.First let me tell you just a very little bit about credit scores. There are different scores for the type of credit that you apply for, For instance, if you apply for a car loan your score is not going to be the same as if you apply for a credit card.Mortgage credit scores are the ones that are the most talked about so let's just talk about those.First, there are 3 "bureaus". That means that there are 3 different reporting

agencies that creditors report to. They are Experian, TransUnion, and Equifax. (Not all creditors report to all 3 bureaus but that is a subject for another blog.)All the time I ask people if they have any idea what their credit score is and inevitably they tell me what their Credit Karma score is. At best, I would say that Credit Karma is a guideline. If your scores are in the 600's then probably Credit Karma will give you a score somewhere in the 600's.The problem with that is that when you apply for a mortgage loan all 3 bureaus are pulled. Mortgage programs are based on what your middle score is. For instance, if your scores were 680, 650, and 634 the score that the mortgage company will look at is the 650 score. If your desired mortgage programs requires a 660 score and Credit Karma told you that your score was 660----well you can see what happens.Recently, I had an applicant that needed a particular score, 620, to get a mortgage program that he needed. He was a Credit Karma fan. Credit Karma showed him that his score was over 620. However, when I pulled his credit his "mid" score was 614.

Credit scores change every time that a creditor reports to the bureaus. So we needed his creditors to report again to get that score up. Every day he watched Credit Karma and finally it said that it had been updated by the creditors. So we pulled credit again. Nope. None of the creditors that Credit Karma said had updated his status had done it.So let me end by saying this. If you are thinking about buying a house and you need a mortgage, contact me. Let's pull your credit and see what your "real" scores are---the scores that will decide what kind of mortgage program you are eligible for.Pamela MadorePamela Madore MortgageNMLS #2896353955 S. SoncyAmarillo, TX 79119806-290-1920http://pamelamadoremortgage.com